Friday, March 07, 2014Last Update: 7:46 AM PT

Art Company Says Fake Dalis Were Passed Off

LOS ANGELES (CN) - A trust duped an art company paying a $1 million down payment on a Salvador Dali collection that contains only a few of the pieces of the artist's work, the company claims in court. Continuum International Art Holdings sued The 2012 Scott Ifversen Revocable Trust, its trustee Don Lewis, and Harry O'Connor, aka Jerry O'Connor, in Federal Court. Claiming in the lawsuit that it is "difficult to imagine a fraud more blatant and egregious," Continuum claims the defendants knew the Dali collection they had valued at $55 million is made up of work by the artist Christopher Huss. And, Continuum claims, the defendants used Continuum's $1 million to settle the fraud claims of an art broker they had tried to dupe. Ifversen and O'Connor knew that the collection, which they bought for $40,000, includes replicas of Dali's work for the 1944 Alfred Hitchcock movie "Spellbound," the holding company says. Huss had made clear to the two men that they were misrepresenting his work in the collection, created using a special Xerox process, according to the lawsuit. Two prominent Dali experts, Robert and Nicolas Descharnes, had confirmed that the works were not created by Dali's hand, Continuum adds. After that expert assessment, the Ifverson trust and O'Connor allegedly hired James Long to sell the collection. But Long got wise and sued for fraud, the lawsuit states. Continuum says the defendants used its $1 million to pay a $250,000 settlement after Continuum entered into two agreements to purchase the work. "In other words, defendants were operating something akin to a Ponzi scheme, using money fraudulently acquired from later victims to payoff earlier victims," the 28-page complaint states. Ifversen died in December 2012, just weeks after Continuum inquired about the collection. His trust then took a 95 percent interest in the paintings. When the Descharnes inspected the 66 pieces in the collection, Continuum says, it learned that most of the paintings in the collection were not by Dali. In addition to defendants' "grotesque fraud," Continuum says, Jerry O'Connor's 5 percent interest in the collection was never disclosed. The art dealer claims that the trust offered to scrub the deal and pay back the $1 million to "unwind the fraudulent transaction." "Defendants' strategy is akin to a bank robber who, after being caught red-handed, seeks to return the money he stole in return for waiver of criminal charges," the lawsuit says. Continuum asks the court for punitive damages, to stop defendants' "fraudulent conduct once and for all." It is represented by Craig Marcus with Glaser Weil Fink Jacobs Howard Avchen & Shapiro. Dali (1904-1989) a self-promoting genius, was one of the most imitated, and most often forged, artists of the 20th century. He best known work, "The Persistence of Memory," features melting clocks in a desolate landscape.